Steps for flexible post-crisis planning

CLIVE WEBB, ACCA’s senior insights manager

Planning their recovery from the current situation is an activity that organisations need to focus upon. The situation will however remain fluid for many months to come and any planning needs to reflect the degree of uncertainty.

Resumption planning needs to embrace both the medium (post lockdown) and longer-term (increased stability) phases, recognising that both are connected. It is unlikely that a full resumption of business activity as it was before the pandemic will occur in the foreseeable future. Organisations need to adapt their ways of working to understand what is feasible and can address customer demand.

In any planning scenario, the four dynamics of people, process, technology and data need to be considered throughout. Robust processes and efficient data flows are essential to the agility that organisations will need to demonstrate in the coming months.

The following steps provide some guidance on the considerations in the process:

Risk assessment

Before commencing any planning for resumption, a full risk assessment should be conducted. This should consider the impacts on the following areas of the organisation:

• People

• Office and other physical facilities

• Customer demand

• Supply chain

• Impact of changing government restrictions

Understanding the vulnerabilities in these areas is paramount. Unidentified risks in any of these areas can negate a through resumption plan.

People

The workforce and the customers are at the centre of any plan. The workforce needs to be comfortable in returning to work, while effective communication of the strategy to safeguard the workforce is essential.

In developing a plan, the following areas need to be considered:

• Impact of social distancing on the working environment

• Shared facilities within the workspace, including interaction with other tenants in a shared building

• Enhanced cleaning routines and other protective equipment requirements

• Staggered working hours, including other tenants in shared buildings

Current research shows a level of hesitancy among the workforce in returning to the workplace. Employers need to be sympathetic to this and consider whether business can be sustained through on-going remote working, with only essential office contact when required.

Costs of safeguarding the workforce need to be considered and whether an effective working environment can be maintained. Any adjustments to the workplace need to be made before staff return to work.

Be prepared for continued disruption in the workforce. A relaxation in lockdown policies reflects the ability to manage the pandemic, not to stop it. Infection risks remain high and not all the workforce may be available.

The impact of the people plan on the workforce needs to be effectively communicated with sufficient time to allow appropriate measures to be put in place for their own safety outside the working environment, including the implications of care for vulnerable people and commuting risks.

Understanding customer reactions is essential. Any assumption that pre-crisis customer demand will return needs to be validated. Communication with potential customers needs to start early, certainly before recommencement.

Business strategy

Organisations need to reassess the business strategy. Consumer demand will have changed because of the pandemic and product or service ranges that were previously offered may not be required.

The resulting business strategy needs to consider which products and services make the greatest financial and societal contribution to the organisation. This is identifying a minimum viable organisation, one that can deliver products and services in line with the anticipated customer demand but also reflect the constraints of the physical resources and the supply chain.

Supply chains will continue to be impacted for some time to come. A reconfiguration of business strategy needs to consider what the supply chain needs to provide, what sources are available and the extended lead times in sourcing.

The strategy will need to be flexible as uncertainties remain. Scenario planning and cashflow modelling remain essential as the strategy continues to evolve. This needs to draw upon the data sources that the organisation has available using analytics tools to generate insight.

Liquidity will remain an essential component of any plan requiring assessment of short-, medium- and long-term needs. Ensure that stress tests are undertaken to identify key challenges in liquidity.

Maintaining resilience

Organisations need to remain flexible in adapting to the developing situation. Crisis management teams that were formed in the early days of the pandemic retain their vital role.

The risk landscape has changed because of the pandemic. Cyber-crime is a significant threat with bad actors willing to exploit changed vulnerabilities. Employee disgruntlement and the potential for fraud are also increased. The ability to respond to what might be perceived as more traditional risks through effective contingency plans remains essential.

Ensure that lessons are continually learned. Listen to the opinions of employees, customers, and suppliers. Be prepared to react to these and adapt strategies when necessary.

Communication strategy

A clear communication strategy with employees, customers, potential customers and suppliers is essential. Being definite about what can be delivered in certain timescales is important in achieving confidence.

Communicate with investors, lenders and other stakeholders to ensure that they are aware of the plans and how these plans continue to evolve.

For those organisations in regulated industries ensure that communication channels with relevant regulators remain open.

Government assistance

Changes in government assistance programmes will occur over time. Organisations should continue to take advantage of these where relevant. The programmes will continue to provide support in varying forms over different periods of time.

It needs to be recognised, however, that these programmes will be reduced and understanding the vulnerabilities to organisations of these changes needs to be modelled.

(Content courtesy ACCA)